Heineken

Ppt :

* Strategic and operating decisions are decentralized to strategic business units in each country. This BU are independent from each other.

* Products and services are tailored to local market (e.g. consumers’ needs, industry conditions…).

Localization strategy (=Multidomestic strategy in book p231):

Definition: “A Localization strategy (or multidomestic strategy) is an international strategy in which strategic and operating decisions are decentralized to the strategic business unit in each country so as to allow that unit to tailor products to the local market”.

The Localization strategy is commonly used by European multinational firms because of the variety of cultures and markets found in Europe.

Advantages:

* The firm can customize its products to meet the specific needs and preferences of local customers.

* Enable the company to expand it local market share.

Disadvantages:

* Do not allow economy of scale and could be more costly.

* Can create divergence of strategy between the local unit and the headquarters.

Transnational strategy

Definition: “An international strategy through which the firm seeks to achieve both global efficiency and local responsiveness”.

Advantages:

* Better performances than either localization strategy or global international strategy.

Difficulties:

* Simultaneous requirement for strong central control and coordination to achieve efficiency, and local flexibility and decentralization to achieve local market responsiveness.

Standard globalization strategy

Definition: “A Standard globalization strategy is when a firm produces in one or a few locations a standardized product for sale in all markets in order to make economies”.

Advantages:

* Allow economies of scale.

* Economies of location.

Disadvantages:

* Minimal product differentiation no adaptation to local market.

International strategy

Definition: “An International strategy is when a...